A Steel Manufacturer Experienced a Decrease in Its Fixed Asset

question 164

Multiple Choice

A steel manufacturer experienced a decrease in its fixed asset turnover from .9 in Year 5 to .7 in Year 6.This change is consistent with which of the following explanations?

• A)The firm sold a fully-depreciated factory on January 1, Year 6 that had been closed in Year 4 and held for sale since then.
• B)The steel industry operated at capacity during Year 6, permitting all firms to raise selling prices.
• C)The firm recognized an impairment loss on a factory that became obsolete during Year 6 because of new environmental regulations.
• D)The firm decreased the number of units produced and sold because of an inability to obtain needed raw materials.
• E)none of the above

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Definitions:

Purebred

An animal bred from parents of the same breed or variety, maintaining specific desired traits over many generations.

Genotype

The particular set of alleles that is carried by an individual’s chromosomes.

Black Coat Color

A genetic trait determined by the specific alleles in an organism that result in a black pigmentation of the fur or skin.

Solid

A state of matter characterized by particles that are closely packed together, giving it a fixed shape and volume.